Challenge across GCC to integrate nationals into private sector workforce

Emirati nationals peruse the jobs, at Tawdheef, a job fair open to UAE citizens only, on Monday, February 2, 2015, at the Abu Dhabi National Exhibition Center. Silvia Razgova / The National

Saudi Arabia says it will set a minimum private sector wage for Saudis more than double that of expats this year, in a further attempt to address the nationalisation employment agenda. But while focusing on wage incentives is welcome, greater access to improving skills and assessment must be part of the solution.

Employers are more likely to hire a national over a migrant – even if they have to pay more for them – if that national also has certified proof of role-relevant skills.

The Saudi move is the latest in a long line of policies across the Middle East – quotas, prohibitions, incentives and wage protection – that have been set up to tackle perhaps the most crucial socio-economic challenge facing GCC countries today: increasing the numbers of nationals in the local labour market.

The stakes are high, with almost 70 per cent of the Arab population aged under 30 unemployed, according to the Arab World Learning Barometer Report 2014. Yet fewer than two million of the seven million new jobs created across GCC countries in the past decade went to nationals.

Recent nationalisation policies have been well documented. Migrant workers are far cheaper to employ and have fewer employment rights than national workers, with the sponsorship system preventing most migrant workers from moving from one employer to another without permission. The new proposed minimum private sector monthly wage of 5,300 riyals (Dh5,191) for Saudi nationals compares with 2,500 riyals for expats; in Abu Dhabi, the “bonus” for being a national can be up to 600 per cent of the equivalent migrant’s salary, according to a report published last year by the Gulf Labour Market and Migration programme of the Migration Policy Centre and the Gulf Research Centre.

This might make private sector jobs more attractive to nationals, but it also deters employers from hiring them.

Combine all of that with employer-driven open migration and very generous public employment packages, and it becomes clear why the private sector is dominated by migrant workers, and the majority of nationals are in government jobs. The percentage of nationals employed in the private sector ranges from 5 per cent in the UAE to 22 per cent in Bahrain, according to a 2014 report by the Migration Policy Centre.

The vast majority of nationals are willing to work hard to build a successful career. But to do this they need access to the right education opportunities – not just at school, but throughout their professional lives.

Seventy percent of chief executives across the Middle East say a lack of key skills is the biggest threat to success, according to a 2014 PwC survey. If nationalisation policies are to succeed then this must be overcome.

This means developing learning pathways with more skills-based courses outside the school system, digitising more training and assessment – whether that is online, Massive Open Online Courses (Moocs), or computer-based testing (CBT) – in sectors such as renewables, health care and IT.

Access to a network of local CBT centres or even proctored online testing means that a new qualification can be gained by taking an exam on a lunch break, booked on demand, instead of having to travel to a city centre on a set day.

This convenience, combined with increased access to local test centres, can provide crucial encouragement to nationals considering a career in the private sector, or trying to improve their chances of promotion or finding a new job.

But the scale of the solution must fit the scale of the challenge, and positive change of the size required to make a difference can only be realised when there is enough access to role-relevant learning and assessment across the region. In the case of Moocs there are millions of learners and thousands of courses.

They are now so popular in the Middle East that they are being referred to as Amoocs (Arabian Moocs), and Skills Academy, a Mooc aggregator in Egypt, has more than eight million users.

There is still the issue of credibility with employers for Moocs, an issue which could ultimately decide whether their fate is to replace, reinforce or undermine the traditional university model. But credibility issues could be addressed through certifications and qualifications, delivered through the convenience of CBT, which offers highly secure testing environments or even live proctoring.

After all, a certification exam does not necessarily require proof of learning, only measurement of knowledge acquired.

Given that nationalisation policies have yet to succeed in evening up the ratio of national-to-migrant workers across the Middle East, ignoring any potential remedy could have serious consequences. If labour market structure and dynamics do not change, economic growth alone will not be sufficient to provide much-needed local jobs.

Over the next five years, six million jobs will be created across the GCC region while the population is likely to grow by around five million, according to the IMF. Unless trends change, fewer than a third of the newly created jobs will go to locals – and an additional two million nationals could end up unemployed.

Role-relevant assessment and training must form part of the long-term solution to a long-term problem, and improving the competency and quantity of qualified national workers is a crucial step in the right direction.

Matthew Poyiadgi is vice president of Emea for Pearson VUE, which has test centres for exams worldwide